|Approval Date||20 Jul 2018|
|Signature Date||07 Jun 2019|
|Sovereign / Non-Sovereign||Non Sovereign|
|DAC Sector Code||24030|
The proposed intervention consists in providind to the Uganda Development Bank Limited (UDBL): (i) a Government Guaranteed Line of Credit for onlending to projects in various sectors in Uganda and (ii) a Line of Credit under the SME program to finance SMEs and benefit from a Technical Assistance (TA) of up to USD 1 million which will include components to develop UDBL’s credit risk management capabilities and processes /improve loan quality, corporate governance as well as capacitating the development outcome tracking capabilities of the institution. UDBL is a Development Financial Institution (DFI), which is wholly owned by the Government of Uganda and has been in existence since 1972. Its mandate is to intervene in SMEs and priority sectors in line with the Government’s (GoU) development aspirations. The proposed package provides the Bank an opportunity to play a signalling role for other investors. The provision of USD 20 Million LOC to be made available as a senior loan, along with a Technical Assistance facility will enable UDBL fully play its role as a national development financial institution in charge of implementing the country’s national development strategy and vision of being a middle-income country by 2040. Target sectors are enablers of economic growth such as agriculture, light manufacturing, tourism health and education. On-lending under the proposed sovereign-guaranteed LOC is expected to benefit infrastructure projects and SMEs operating in a variety of sectors, such as agriculture, light manufacturing, health, tourism and education mainly with the objective of alleviating poverty in line with the country’s National Development Plan (NDP.2).
Uganda Development Bank Limited (UDBL), the country’s premier development financial institution’s duty is to help accelerate Uganda’s development by supporting small & medium enterprises (SMEs) and large-scale development projects in the various key growth sectors, thereby, address the financing gap to SMEs and Infrastructure projects in the country.
UDBL intervenes in sectors such as agriculture and agro processing, hotel and tourism, education, health and manufacturing among others. The project will enhance private sector development, by demonstrating the viability of investing in growth-oriented SMEs. Increased revenue by the beneficiaries at sub-project level will lead to incremental tax accrual to the Ugandan government of Uganda. The facility will also support financial inclusion, gender and social benefits as well as fiscal impacts. The investment will therefore contribute to providing quality and low-cost education and health services to Ugandan communities thus narrowing down the existing widening social and income gaps in the country. It had since inception to December 2017 facilitated over UGX 241.6 bln worth of loans and created/retained over 17,016 jobs of which 16,851 were new.
African Development Bank
|Last Update||21 Jan 2021|